Northrop raises full-year forecast on space unit strength

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(Reuters) – Defense contractor Northrop Grumman Corp (NYSE:NOC) raised its full-year forecast on Thursday on the back of continued strength in its space unit which makes satellites and missile systems.

Analysts say Northrop’s B-21 bomber and GBSD intercontinental ballistic missiles are likely to be the backbone for the company’s growth over the next decade.

The United States is modernizing its military in an effort to deter Russia and China, which is likely to boost the company’s balance sheet.

The company now expects full-year adjusted earnings per share between $24.40 and $24.80, up from its prior range of $24 and $24.50.

It expects full-year sales to be between $35.8 billion and $36.2 billion, above its previous forecast of $35.3 billion and $35.7 billion.

Sales in Northrop’s space systems business jumped 34% to $2.75 billion in the second quarter ended June 30.

Space has been the fastest growing unit as countries ramp up investment in capabilities. Earlier this month, the company won a contract worth $935 million to develop living quarters for NASA’s planned outpost in the lunar orbit.

Quarterly sales rose to $9.15 billion from $8.88 billion a year earlier. Adjusted net earnings was $1.04 billion, or $6.42 per share, in the second quarter, from $1.01 billion, or $6.01 per share, a year earlier.